The Group of Seven (G7) advanced countries, along with the European Union (EU) and other allies, have agreed to institute a global price cap on Russian refined oil products to prevent access to ships, marine insurers and services unless the refined oil products are purchased for a price at or below an agreed limit. This system is similar to the one that went into effect for Russian crude oil in December.
The US Department of Treasury announced on Friday that the US and its allies are trying to further limit Russia’s ability to make money and finance its war efforts with new price limits on products like gasoline and fuel oil, adding to sanctions on Russian energy sales in response to the country’s invasion of Ukraine.
The G7 and the EU had agreed in December on a price cap of $60 (55 euros) per barrel of crude oil from Russia. As part of this agreement, the countries have now set a price cap of $100 USD per barrel for “premium-to-crude” petroleum products like diesel, kerosene and gasoline, and $45 USD per barrel for “discount-to-crude” petroleum products like fuel oil.
The European Union's prohibition of imports of Russian crude oil products, such as diesel and naphtha, is set to take effect on February 5. This will apply to anything produced from Russian crude oil and the EU’s proposal, submitted last week, called for capping the price of Russian diesel sold to third countries at $100 per barrel for products that trade at a premium and $45 for those that sell at a discount.
The US Department of Treasury said the maximum price for seaborne Russian-origin petroleum will be US $100 per barrel for “premium-to-crude” products as of Sunday, and US $45 for “discount-to-crude” products.
The US and allies are trying to further limit Russia’s ability to make money and finance its war efforts with new price limits on products like gasoline and fuel oil. A senior Treasury official said the goal is to “cut off the revenue” and “go after the things that are crucial to the Kremlin’s war effort and their ability to prop up their economy.
0. “Europe set to ban Russian diesel and other oil products” NPR, 3 Feb. 2023, https://www.npr.org/2023/02/03/1153833640/europe-russian-oil-products-ban
1. “The Fixed Game of Price Caps on Russian Oil” The American Conservative, 4 Feb. 2023, https://www.theamericanconservative.com/the-fixed-game-of-price-caps-on-russian-oil/
2. “Russia Enacts Oil Sale Ban on Price Cap-Compliant Countries” The Moscow Times, 1 Feb. 2023, https://www.themoscowtimes.com/2023/02/01/russia-enacts-oil-sale-ban-on-price-cap-compliant-countries-a80105
3. “US, EU, G7 and Australia announce new price cap on Russian petroleum products” CNN, 3 Feb. 2023, https://www.cnn.com/2023/02/03/politics/price-caps-russian-petroleum-products/index.html